Kuwait Central Bank Sharia Supervisory Board Draft Law
Kuwait is a wealthy and steadily growing nation. The country has vast oil reserves and a strong economy, with a large proportion of its population being comprised of expatriates (around 70%). The state also contains a strong banking sector and a stable business environment, which is highly attractive to numerous foreign entities.
The country’s banking and finance sectors are governed by the Central Bank of Kuwait (CBK), which is responsible for the regulations that govern all banking entities and their activities; and it is also involved in the more overarching financial outlook and position of the nation.
On top of this, Kuwait being a Muslim country, the Sharia principles play a crucial role in the regulations and must be taken into account in all activities, whether they are business related or not. It is important to note that the CBK is in the draft phase of producing a new law to introduce Sharia supervisory boards to manage numerous Islamic banking activities.
Sharia Supervisory Board
While the potential amendments to the laws are still in the draft phase and have yet to go through the Council of Ministers, the first moves have indeed occurred in this direction.
The change aims to ensure all Islamic banking-related activities are performed as per fatwas and agreed-upon Islamic standards. While most operations performed by Islamic banks or concerning Islamic banking take serious consideration of the religious rules and practices, this additional board will ensure, to the fullest degree, that there are there are no activities performed which are not permitted or that there is little to no consensus regarding.
This change will likely have minimal impact on the performing of already established services, though it will ensure the methods behind the services and any new products that arise are considered in depth and verified.